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Carlos Tavares, the CEO of Stellantis NV, who was well-known for his cost-cutting efforts, left the company after a disagreement with the board on how to stop declining sales and a stock decline.
The business said in a statement confirming a Bloomberg News report earlier Sunday that Tavares will transfer leadership of the manufacturer of Fiat vehicles and Jeep SUVs to an interim committee led by Chairman John Elkann. According to the corporation, a new CEO would be appointed in the first half of 2025.
According to the firm, the CEO is departing earlier than anticipated because his opinions on the future of the automaker diverged from those of the board and some shareholders. Tavares had been in charge of Stellantis since its establishment in 2021 as a result of the union of Fiat Chrysler and PSA Group, the parent company of Peugeot and Citroën.
Prior to Stellantis starting the process of finding a successor, Tavares had stated that he would remain until the end of his mandate in early 2026.
Tavares is among several industry leaders who have faced criticism as automakers deal with a declining market that is hampered by China’s economic downturn, waning demand for electric vehicles in Europe, and the possibility of tariffs as Donald Trump gets ready to retake the White House. Stephen Ma, the chief financial officer of Nissan Motor Company, is also expected to resign, according to information obtained over the weekend.
Following setbacks that caused the automaker to lower its full-year profit and cash flow projections in late September, Tavares has been attempting to recover control in recent weeks. The severity of Stellantis’ warning worried investors, even though European competitors like Volkswagen AG are also having trouble with low demand.
Financial Advice
The shares of Stellantis have dropped 38% over the last 12 months, despite the company’s financial guidance for the year being confirmed on Sunday.
Tavares was criticized by investors, dealers, and unions in recent months for declining sales, an outdated US car lineup, and excessive inventory, which led to the profit warning in September. Market share continued to fall in important markets, including France, despite Tavares’ promises of improvements and efforts to replace his finance chief and other executives. This fueled worries about the carmaker’s long-term prospects.
Tavares, 66, long wowed investors with his ability to turn around failing automakers where others failed after working his way up the ranks at Renault SA under cost-cutting champion Carlos Ghosn.
Early on as CEO of Stellantis, he was on course to replicate that success by cutting employment and the number of vehicle platforms. Unions warned that the company’s cost-cutting strategy was causing quality issues and delays in the launch of important new models, which heightened tensions in recent months. Dealers in the United States accused Tavares of harming brands including Chrysler, Dodge, Ram, and Jeep.
According to Erik Gordon, a professor at the University of Michigan’s Ross School of Business, “North America will miss him.” Not by the vendors he clashed with. By the dealers he battled with, no. And not by auto customers who disregarded his cars.
The UAW’s Perspective
The action was hailed as “a major step in the right direction for a company that has been mismanaged and a workforce that has been mistreated for too long” by United Auto Workers union president Shawn Fain.
On October 31, Doug Ostermann, the company’s chief financial officer, who was brought on board following the September profit warning, reported “good progress” in cutting inventory and enhancing market share trends in the US, which is the company’s largest profit pool. Later this week, Ostermann will participate in a fireside chat at a Goldman Sachs car conference.
Stellantis’ production levels in Italy have also caused company to fight with the Italian government. According to those with knowledge of the situation, Elkann warned Italian Prime Minister Giorgia Meloni before Tavares resigned.
